The average target price of PZS.DE is 3.0 and suggests 29% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 3.0. This translates into 31% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 3.0. This suggests 29% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Scherzer & Co. AG is a publicly owned investment manager. The firm provides its services to Institutional and private investors. The firm focuses on high-growth companies that have a sustainable business model. Scherzer & Co. AG was founded in 1880 and is based in Cologne, Germany.

Germany

Scherzer & Co. AG

Financial Services

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

PZS.DE reported revenue of EUR 4mn in the last 12 months, down 58% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 900% from FY23 to EUR -0.20. Market expects EPS to reach EUR 0.08 in FY24.

Over the past six months, the stock has consistently climbed, resulting in 6% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 9ppts in total. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 7ppts and accelerated its growth by 9ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 136.1% in the last 12 months, up from 20.4% in FY23. 

Historically, PZS.DE has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -150.2%, down from 10.6% in FY23. 

Scherzer & Co. AG reported a return on equity (RoE) of -8.9% in the last 12 months, down from 1.9% in FY23. The market consensus projects an RoE of -5.6% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -7.6% in the last 12 months, a decrease from 1.5% in FY23. The market analysts predict that RoA will be -4.7% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -8.0%, below the peers. The consensus estimate for FY24 for RoCE is -9.4%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.5 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

PZS.DE has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, excessive margin volatility, and poor cash flow generation.

In highly turbulent market conditions, PZS.DE is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, PZS.DE is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to average. 

Based on key historical and expected multiples, the stock is slightly overvalued relative to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITD. 

Scherzer & Co. AG

€ 2.32

3

Scherzer & Co. AG

€ 2.32

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 2.32

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